Bird has filed for Chapter 11 bankruptcy, bringing the electric scooter company’s difficult year to a close.
Bird stated today in a press statement that it has begun a “financial restructuring process aimed at strengthening its balance sheet,” with the business continuing to operate as usual in pursuit of “long-term, sustainable growth.”
Travis VanderZanden, a former CEO of Lyft and Uber, founded Bird in 2017, which is one of many businesses worldwide developing dockless micromobility platforms that allow city dwellers to pay for momentary access to electric scooters or bikes. The business went public in late 2021 via a SPAC merger, but in a crowded market predicated on dubious economics, its stock took a perpetual plummet, with its market valuation plunging from more than $2 billion upon its NYSE debut to only $70 million a year later. Because of this reduction, the NYSE issued a warning that Bird’s share price was too low.
Things did not improve, and with the business’s share price continuing to fall, CEO VanderZanden resigned in June, and the company was delisted from the NYSE in September.
Separately, Bird announced layoffs immediately after purchasing competitor Spin for $19 million.
Chapter 11 A Chapter 11 bankruptcy will allow Bird to reorganize its finances without disturbing day-to-day operations, with current lenders like Apollo Global Management affiliate MidCap Financial providing $25 million in funding via the bankruptcy process.
The ultimate objective is to sell Bird’s assets, with a “stalking horse” agreement kicking off a bidding process meant to extract as much value as possible from Bird, with lenders establishing a baseline price before opening things up to external bidders over the following four months.
According to the announcement, interim CEO Michael Washinushi will remain in his post both before and after the restructure.
“This announcement represents a significant milestone in Bird’s transformation, which began with the appointment of new leadership early this year,” Washinushi said in a statement. “Through this restructuring, we hope to accelerate our progress toward profitability by right-sizing our capital structure.” We are committed to our aim of making cities more livable by reducing automobile use, traffic, and carbon emissions via micromobility.”
It’s also worth mentioning that Bird’s Canadian and European businesses are unaffected by the bankruptcy and will “continue to operate as normal,” according to the firm.
This latest development comes only one day after rival Micromobility.com was delisted from the Nasdaq due to its declining stock price, three years after it, too, went public via a SPAC merger. In Europe, dockless scooter company Tier recently laid off 22% of its personnel after the collapse of Dutch e-bike firm VanMoof.
Overall, it has not been a good year for the micromobility sector.
